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2“I think every girl deep inside dreams about having themoney to be able to buy the Louis Vuitton bag or being atthe red carpet herself and wear a beautiful Chanel dress” -Qualitative research, UAE, 2010.Luxury brands have always been a fascinating space and luxury brand marketing oneof the most complicated ones. So, going by the above consumer quote, this paperattempts to decode what makes LouisVuitton, LouisVuitton; Chanel, Chanel – in simplewords what makes a luxury brand desirable? What are the ingredients/componentsthat make up a luxury brand?Is it the physical / functional attributes like the product quality, craftsmanship, design,technology? As one respondent in one of the qualitative research in UAE said “Whenyou buy something with really high-quality, you can genuinely feel the difference. It isin the touch, the feel of the material; it’s in the smoothness, it’s in its minute details...”Or is it the self-asserting emotional stimulation of letting the others know that I’vearrived & I have a penchant for finer things in life not common to many? A respondentsaid “I bought my BMW, just to keep my key on the table during the meeting.” Anotherrespondent said “If I stop at a signal I feel I will attract attention of people”.Or is it that luxury brands are just the stepladder to move to the right circle or anappropriate thing to have or wear in that circle? A respondent said “There is a proverbwhich says if you wear nice shoes you enter nice place”.
3 MOTIVATIONS - SELF ASSERTION, DIFFERENTIATION ANDGENUINE APPRECIATION FOR PRODUCT EXCELLENCE:In my assessment, by-and-large the above are the three major motivators that drivepeople to desire and acquire luxury brands. That said, it’s important to acknowledgethat they are not mutually exclusive.Exclusivity has always been connected to luxury brands. But from the consumer’sperspective the definition of exclusivity goes through an evolution. At the early stage,having the ability or affluence to own a luxury brand desirable and recognizable byeveryone is exclusivity. It is a means by which consumers assert themselves - whetherit is to fit-in or simply to make a statement.As the consumer moves on and with more people joining the ‘ownership’ circle, justowning a recognizable symbol is not enough – the new need to “differentiate” sets into further confirm their social status and to stand-out among the equals. The source ofexclusivity, then, can manifest in form of acquiring limited editions or something withextraordinary product capabilities or rare materials, craftsmanship; it can also be drivenby brand’s distinctive personality or simply the knowledge of the brand legacy. Onecan also observe that people who seek differentiation tend to have larger repertoireof luxury brands, have a choice of not-so-common luxury brands, have a definitivereason for their choice and sometime even prefer to stick to specialist brands. Few ofthe consumer quotes (below) from various quantitative researches in UAE emphasizethis point:“I prefer to buy my watch from an expert watch-brand, not a fashion label.”“I like things that are exclusive and specialized like the really top suit brands …and ties.You know, where one tie is the price of a good Armani suit, but that you’ll only find inItaly, only at one location and not in any branches anywhere else in the world. That’slike once in a while you want to buy something that’s special and wear it a few timeson specific occasions.”3
While genuine appreciation for product excellent needs no explanation, as mentionedearlier it is not mutually exclusive. In simple words, it does not mean that people whoacquire luxury brands for either asserting-self or differentiation have no appreciationand love for beautiful products. But, then there are others who buy luxury withouthaving any baggage of what others think. They buy it because they genuinely lovethe physical / functional attributes that the product delivers or because they find aprofound connection with the brand / the brand story.Thebottomlineisthatwhetheritisselfassertion,differentiationorgenuineappreciationfor product excellence, these stories and the aura that surrounds the brands is whatmakes luxury brands desirable. Packaged as the 8 P’s of luxury brand marketing, thispaper attempts to bring together the elements and interplay between them that areemployed in the luxury brand marketing mix. Some of the elements have been namedto fit the 8P packaging and therefore, my humble request to readers will be to takethe broad-point made versus getting stuck in semantics. Yet, another important pointto acknowledge is that the degree of significance of these elements may vary frombrand-to-brand and market-to-market. The point-of-view of this paper is more that ofa practitioner, than a theoretician.4
PERFORMANCETHE 8 P’S – PILLARS OF LUXURY BRAND MARKETINGPerformance refers to the delivery of superior experience of a luxury brand at twolevels – first, at a product level and second, at an experiential level.At a product level, fundamentally it must satisfy the functional and utilitariancharacteristic as well as deliver on its practical physical attributes – a recipe of qualityor design excellence ingredients like craftsmanship, precision, materials, high quality,unique design, extraordinary product capabilities, technology & innovation. Forexample:On their 70th anniversary, Patek Philippe unveiled a newcomplicated wristwatch. Along with a unique columnwheel chronograph movement, the day and month appearin a double window at 12 o’clock, with a hand indicating thedate around the moon phase. The leap year is displayed in asmall round window at 4:30 opposite a matching windowfor the day/night display at 7:30.Like all the brand’s grand complications, it has twointerchangeable backs - one in sapphire crystal that revealsthe movement complexity and the elegance of its finishing,the other, a white gold solid back that can be personalizedwith a dedication or an engravingOmega Speedmaster Chronograph – the moon watch:Selection by NASA, a walk in space in 1965 and since 1969six mission to the moon is what makes this series withextraordinary capabilities. After it became a life-savinginstrument during the Apollo 13 mission, the Speedmasterwent on to become a symbol of peace, as both American& Soviet astronauts wore it in the first joint space-missionduring the cold war. It never left the Space Program as itstill the only watch certified by NASA for all EVAs (Extra-Vehicular Activities). 5
A luxury brand must perform at an experiential level as well, i.e. the emotional value ofthe brand the consumers buy into – beyond what the product is to what it represents.For example: Rolex stands of symbol of heroic achievement & Tiffany is a symbol oflove and beauty.6
PEDIGREE7Many luxury brands have a rich pedigree and extraordinary history that turn in to aninseparable part of the brand’s mystique. This mystique is generally built around theexceptional legendary founder character of the past, making up an integral part of thebrand story and brand personality.So, when consumers buy say a Cartier or a Chanel product - it is not only because ofthe product performance factor, but subconsciously they are also influenced by thebrand’s rich lineage, heritage and the years of mastery.Coco Chanelstarted herbusiness in 1913and within a fewdecades, becamea revolutionarycouturier.Gucci opened the doors of its ownmuseum in Florence to mark thecompletion of the house›s 90th-anniversary celebration.Similarly,Rolls-Roycecelebratedthe 100thanniversaryof its iconicemblem, theSpirit of Ecstasy with ‘100 cars for 100 years’ andfeatured a collection of Rolls-Royce models,supplied by members of the Rolls-RoyceEnthusiasts’ Club, dating back to 1911Karl Lagerfeld tookthe helmin the 1980sand has beenmodernizing thebrand eversince.With Chanel CocoMademoiselle campaigns in1981, 2008, 2009 & the recent2011, Chanel has continuouslyleveraged its pedigree / brandmystique.
PAUCITY8Over-revelation-and-distribution of luxury brand can cause dilution of luxury character,hence many brands try to maintain the perception that the goods are scarce. Case inpoint - Burberry diluted its brand image in the UK in the early 2000s by over-licensingits brand, thus reducing its image as a brand whose products were consumed only bythe elite. Gucci, now largely sold in directly-owned stores, following a nearly cripplingattempt to widely license their brand in the 1970s and 1980s.Broadly, there’s natural paucity (the actual scarcity), the technology-led paucity andthe tactical- driven paucity.Natural paucity is triggered by scarce ingredients like platinum, diamonds, etc. and/or those goods that require exceptional human expertise, for example handcraftedquality that constraints the mass production.Technology-driven paucity is as a result of conception-time involved in continuousinnovation and research-&-development process.
9Tactical- driven paucity are more promotional in nature such as the limited editionsor the special series to generate artificial desire and demand. Another deviation withinthis is the customization of luxury good, e.g. Garson USA custom made a diamond-encrusted Mercedes SL600 for Prince Al-Waleed bin Talal of Saudi Arabia in 2007.
PERSONA10The persona of a luxury brand is largely a result of – first, its distinctive projection pluscoherence of its applications across consumer touch-points and second, the brandcommunication through its advertising.The visual brand identity captures the brand’s personality, mystique & emotional valuesin a nutshell. The distinct and consistent orchestration of the identity is central toestablishing the visibility, familiarity & common identifiable brand imagery. The visualbrand orchestration can manifest by way of its coherent application of its identity, thebrand color(s), the other design elements like icons, the uniquely identifiable design,branded environment and even the tone-of-voice.While the luxury brand’s visual identity is a fairly stable factor, luxury brand advertisingis a more dynamic and versatile marketing vehicle. While the pedigree of the brandhas its role, keeping-up the contemporary-appeal and the newness-factor is crucial forenduring brand relevance. Therefore, luxury advertising not only needs to generatethe desire for the seasonal collection, but at the same time it must also enhance thebrand’s cool-quotient, thereby making it continuously desirable and aspirational.
At an overall level, luxury advertisingmessages can be observed:• As more emotional and sensual todistance it from mass-premium brands• Create a world and an aura that is trulyexceptional to their brand signature• Generate major differentiation in itsproduction and executionOneoftherelativelynewtrendswithinluxurybrandcommunicationistheuseofthelong-form-commercials or the short-film-videos to generate interest with the online audience.It is clearly a pursuit where luxury brands are looking to bridge the gap between thefamiliar world of print and the fast-evolving world of online. It has also proved impactful asin a matter of few minutes, the viewer can have a clear understanding of the brand imageor the story the brand is trying to convey or simply promotion of the new collection.The short-flash-videos at Montblancwebsite focuses on its craftsmanshiplegacy: http://bit.ly/uiSQ8FA one-and-half minute video byTiffany Co. focuses on promoting giftingduring holidays.http://youtu.be/BacfKM3876gLouis Vuitton created a 3-minutethematic video for its ‘journey’campaign.http://youtu.be/NQlueM5ETYU 11
Some of the luxury brands have also utilized the social media. The objective may notnecessarily be, as deep as, engaging the audience in their storytelling, but it has beendone largely to generate the desire or the lust for the brand or the product. It is also aneffective tool to keep-up the contemporary-appeal and the newness-factor by having acontinuous dialogue.Some of the luxury brands have also utilized the social media. The objective may notnecessarily be, as deep as, engaging the audience in their storytelling, but it has beendone largely to generate the desire or the lust for the brand or the product. It is also aneffective tool to keep-up the contemporary-appeal and the newness-factor by having acontinuous dialogue.With the objective of strengthening the brand’sassociation to love and romance Tiffany co.launched whatmakeslovetrue.com and iPhoneapp as a guide to those who want to take theirromantic relationship forward. The website alsoshowcases select true love stories of real peopleto give that personal touch.Jimmy Choo organized a real-timetreasure hunt around London viaFoursquare to engage fans both onlineand off.In line with its brand essence of ‘symbol ofheroic achievement’, each year rolexawards.com showcases pioneering projects of realpeople that demonstrated innovative thoughtand betterment of human-kind. Thereby,establishing a personal affinity with theiraudience, beyond celebrity endorsement.GuccihassuccessfullykepttheirhighnumbersofFacebook fans engaged by continually updatingtheir content, thereby sparking conversations inthe form of ‘likes’ and ‘comments’. 12
PUBLIC FIGURES13Public-figure or celebrities have been traditionally employed as one of the marketingmix in luxury brand advertising and they still continue to garner attention, credibilityand impact. Public figures can span from film-stars to music personalities, from sportspersonalities to royal families and even the designer themselves. But because celebrityendorsements are no longer exclusive to luxury space and extensively used (andabused) across mass categories, it take a different meaning when it comes to luxurybrand endorsement.Not only does the public figure’s associated values and personality have to resonatewith that of the luxury brand’s aura, but there’s a distinct difference in the way celebrityrole is crafted, executed and strategically utilized. Beyond traditional advertising(largely print in selected media), less in-your-face advertising tools are employed likeaccessorization or dressing celebrities for their walk down the red carpet, productplacements within movies and television programs, invites to special events. Thisstrategy attempts to remove the appearance of “selling” while still promoting theproduct by making it seem as a part of the celebrity’s lives, thereby positively affectingconsumer’s attitudes, brand value purchase intention.Chopard has been officialpartner of the CannesFilm Festival since last 14years, showcasing andpremiering their collectionby accessorizing celebritieson the red carpet.The Lebanese singerand UNICEF goodwillambassador Nancy Ajramwas Cartier’s special guestat the Cartier InternationalDubai Polo Challenge heldin Dubai, UAE in 2010.Omega have sponsoredthe James Bond franchisesince 1995 – earlier withPierce Brosnan and nowwith Daniel Craig.
Long-form-commercials / short-films have also utilized the celebrity-factor. Chanel forinstance recently created 3-minute short film with actress Keira Knightley who replacedKate Moss in its ads for its Coco Mademoiselle fragrance. Other previous faces of Chanelhave included French star Catherine Deneuve and Nicole Kidman, who representedChanel No. 5.Similarly, as a part of their ‘core values’ campaign, Louis Vuitton used their website as theonline medium to showcase their celebrity endorser’s journey, their story to bring to lifehow the brand has been promoting the art of travel and inspiring legendary journeys.The Coco Mademoiselle campaignwith Keira Knightleyhttp://youtu.be/TiO2o1NChAUAngelina Jolie’s journey, her story (herjourney to Cambodia) is one of thecelebrity stories featured on LouisVuitton websitehttp://louisvuittonjourneys.com 14
PLACEMENT15The retail branded environmentin luxury branding is all aboutheightening the consumer’s brandexperience and amplifying thebrand aura. Hence, the brandedenvironment, the movement oftruth, is where it must “live” thebrandbyorchestratingimmaculatedetailing that engages all senses ofthe discerning audience.Starting from the choice of storelocation, the chain of touch-points consumer interacts, the salesperson’s presentationandtheimpactofeachtouch-pointiscriticalincreatingauniqueindulgingexperience. That said, today’s evolving luxury consumers are increasingly seeking beyond thetypical sophisticated, over-the-top, cosmetically elegant presentation or even theexclusive invites, privileged previews. With the increasing democratization of luxurybrands and the rapid emergence of masstige brands – the luxury consumers havebecome more discriminating and demanding. They are seeking a more knowledgeableand professional assistance, a trusted and reliable collaboration helping them tomanage their stature and lifestyle. Not only has this led to the new business offeringslike Quintessentially (more below), but also luxury brands are increasingly investing intraining and empowering their sales staff.E.g.: Quintessentially, a Britishcompanywith60officesworldwidedescribe themselves as a ‘luxurylifestyle company’ that providesconcierge services to affluent andhigh net worth individuals. Theirservices include exclusive access to the hottest VIP-events, cultural happenings, once-in-a-life time experiences, top restaurants, clubs, spas and hotels, access to fine wines,private jets, luxury cars and yachts, party planners; art, education and investmentconsultants; travel and adventure specialists, bespoke gifting and styling services –and much more.http://youtu.be/0Pf2fJ5xcz0!
Another important point to note within the placement factor is that it is not limited to thephysical environment where the brand retails, but it extends to all the environments orconsumer touch-points that the brand associates itself with. This spans from the extremelyselective niche media where it advertises to the sports, the events, art, conversations thatit places itself with.If luxury is about environment and aesthetics,then fashion magazines like Vogue, InStyle,Vanity Fair, Harper’s Bazaar, etc. provide thatcomplementing environment and aestheticsfor luxury brand to advertise in print media.Due to their origin in the writing culture,Montblanc supports and honors modern-day patrons of the arts through forums likeDe La Culture Arts Patronage, Young ArtistWorld Patronage, Young Directors Project, theMontblanc Cultural foundation and the Unicefcooperation.Rolex associates itself with more than150 events in golf, sailing, tennis,motor-sport, arts and at equestriantournament vs. associating with sportslike football / cricket that have moremass following.ItaliancarmakerMaseratiplaceditsGranTurismocoupes in “a guerrilla-style-product-placement”for the 2011 Limitless movie where the maincharacter needed a ride to express luxury, styleand performance. 16
PR (PUBLIC RELATIONS)17PR in luxury branding plays an enormous role in image proliferation of the brand,thereby subtly influencing public opinion. It is also employed to convey othersupporting messages and attributes of the brand which cannot be explicitly capturedin advertising, but by no means are less important to create brand’s personality,mystique and emotional values – whether it’s via the pedigree factor or via public-figure any of the previous 7 P’s mentioned.It is also a sophisticated branding machine for maintaining ongoing relevance anddialogue with the luxury consumer, especially so in fashion, technology and seasonaltrends driven categories. At a tactical level, PR is utilized to generate buzz convey thebrand news, point of views of inspirers and influencers (celebrity talk or the designerspeak), a crucial support for brand activation (like the fashion weeks, sport-events,themed previews, etc.).
PRICING18Pricingplaysaquiteabigroleinthewayconsumersperceiveluxurybrands.Consciouslyor sub-consciously, consumers tend to generate a mental luxury stature or image withthe price-range that the brand operates. Therefore, it is important for luxury brandsto price thmeselves right – as setting the price lower than the consumer expectationand willingness to pay can potentially harm the brand value, whereas the reverse canpotentially not given enough justification for consumers to go ahead and buy.The pricing strategy in luxury brands gained spotlight in the recent past not onlybecause of the challenging economic environment, but because of more informed-and-exposed consumers who are more discriminating and demanding, for whompremium pricing without substance doesn’t imply luxury. A recent research by UnityMarketing suggests that affluent shoppers won’t spend ten-times more for somethingonly three times better. The luxury-brands must, therefore, justify their price throughthe interplay of the 7P’s mentioned on top, thereby keep-up and maintain a higherperceived value.The sales promotions also tend to be handled differently by luxury marketers. Whilefew have resorted to sales and discounts, most others play it by adding more value tothe purchase like gift with purchase, gift-certificates or rebates for the next purchase,multiple item discounts, online or email exclusives, more loyalty points, no shippingand handling charges by online retailers, etc. Luxury brands also use the channel ofluxury retailers like Harvey Nichols, Saks 5th Avenue who offer annual sales by offeringthem slightly lower prices.
19Another way employed by luxury brands is by creating an extension into a secondaryline with relatively lower price points like Giorgio Armani’s - Armani Exchange, RobertoCavalli’s - Just Cavalli, Prada’s – Miu Miu, Alexander McQueen’s - McQ lines.
20KEY LEARNINGS TAKEOUTSIn conclusion, the key to luxury brand marketing boils down to the following threepoints:• Product excellence by itself in not enough, the luxury brand must perform at anexperiential level as well. As luxury consumers evolve, not only these act as pointsof differentiation, but also as ‘substance’ to justify a premium value and pricing.• While pedigree factor is important to exuberate the years of mastery or lineage, itis crucial to generate ongoing relevance and dynamism through the persona, PR public-figure factor.• Luxury brands must continue to maintain a certain degree of exclusivity and staturewith the paucity factor and the placement factor – from the retail experience tothe touch-points it associates itself with.The8P’sofluxurybrandmarketingcanprovideaholisticframeworktoluxurymarketers.The 8 P’s may not be a “universal methodology”, yet it presents a strong analytical“toolbox” to audit and leverage the brand potential. That said, a pragmatic approachmust be underlined, as the situation and challenges would differ from brand-to-brandand market-to-market.Rohit Arora is Strategic Planning Director at BPG | bates in Dubai,UAE.Within the luxury segment, he has worked on the strategiccommunication projects of De Beers, Ford-Lincoln, Omegawatches, Sacoor Brothers, Al Tayer Group, luxury real-estateprojects, luxury healthcare project, high-end consumer durablesand banking solutions designed for the high-end consumers.He has also worked with JWT and YR previously.Official contact:firstname.lastname@example.org://twitter.com/#!/rohitsharinghttp://ae.linkedin.com/pub/rohit-arora/6104/293/Author